What is the cardinal rule of the double entry system?

• A- Debit the increasing account and credit the decreasing account

• B- Debit an account and credit another account

• C- Debit the asset account and credit the liability account

• D- Debit revenue account and credit expenditure account

Mr A purchased goods on credit from Mr B but then returned them as they were

faulty.

Which of the following statements would be true?

• A- Mr A would send a credit note to Mr B

• B- Mr A would send an invoice to Mr B

• C- Mr B would send a credit note to Mr A

• D- Mr B would send an invoice to Mr A

A business purchases 10,000,000 KHR of goods on credit.

Which parts of the business’s accounting equation will be altered by this

transaction?

• A- Assets and liabilities

• B- Assets only

• C- Capital and assets

• D- Liabilities only

Goods sold on cash and carry basis returned by a customer are accounted for by

• A- Debiting Sales and Crediting Cash

• B- Debiting Sales and Crediting Accounts Payable

• C- Debiting Inventory and Crediting Cash

• D- Debiting Inventory and Crediting Bank

A credit balance of 5,000,000 KHR in the petty cash book would mean that

• A- we have spent 5,000,000 KHR more than we have received

• B- we have 5,000,000 KHR cash in hand

• C- the book keeper has made a mistake

• D- 5,000,000 KHR has been stolen

Consider the following:

1 An expense is incurred.

2 A liability is increased.

3 Another asset increases in amount.

Which of the above statements might be true when the carrying amount of an

asset held by a business is reduced?

• A- 1 and 2 only

• B- 2 only

• C- 2 and 3 only

• D- 1 and 3 only

A business receives 5,000,000 KHR from a credit customer.

Which parts of the accounting equation will be altered by this transaction?

• A- Assets and liabilities

• B- Assets only

• C- Capital and assets

• D- None of them

Which of the following accounting concepts is described by the following

statement?

Accounting for the effects of transactions and other events and circumstances on

a reporting entity’s economic resources and claims in the period in which those

effects occur even if the resulting cash receipts and payments occur in a different

period.

• A- Cash basis

• B- Accrual

• C- Consistency

• D- Going concern

Which of the following accounting records is used to determine the arithmetical

accuracy of ledger posting?

• A- Sales day book

• B- Control accounts

• C- Trial balance

• D- Cash book

When recognising income under the accrual basis, which of the following

statements is correct?

• A- Income is recognised when earned and cash is received

• B- Income is recognised only when it is not certain that cash will be received

• C- Income is recognised only when cash is received

• D- Income is recognised when earned and not necessarily when cash is

  received